J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

Macro 101 is an amazingly good tool for thinking some things through.If we give corporations more $$$ through a tax break they will use those $$$ to seek the highest return....new plant, debt retirement....etc.

Since they also do basic math they will look at stock buybacks. Guess what. The highest mathematical use of the new cash is often a stock buyback!

Does that increase employment? No. And the logic goes on from there.

And the top 1%? Are they going to increase consumption...?

No, because they already save XXX% of their income. That number only goes higher.

Ahh well.... so much for the growth idea, welcome to the new aristocracy.

To add an inkling in my personal clarification process of the word "profit" to you- here is a link that economists, such as yourself need to examine for "opportunity", "business rights of opportunity to access under the law, any laws, nationally and internationally".https://www.ipwatchdog.com/2012/07/24/facebook-founder-receives-patent-on-his-first-application/id=26740/

What is being patented by the patent office in the US?

There are a good number of critical questions that need to be answered besides that initial question. I am sure you know quite a few. However, what is the real answer in the present that is and will shortly be affecting real economic/business activities, (not activities that only occur in a computer based closed operations systems application) worse than has already occurred?

The structural issues that haunt America's competitiveness far outweigh the benefits of lower taxes. The ugly truth is American companies have little reason to bring jobs home, the logic that lowering corporate income tax will create a massive flow of jobs to our shore is flawed.

Hidden within the tax bill are some provisions aimed at past violations of US tax laws that can lead to both civil fines and criminal prosecution for the corporate managers and their legal counsel who designed some of the schemes companies have used in the past. This could prove very important. More on why jobs may not come back in the article below.

We have corrected this: originally—because of an editing error—the phrase "That implies an increase in annual investment of roughly $800 billion" referred to an increase in GDP rather than in investment.

Talk about heists, here's another one that really reveals what is going on in the real US economy. No other word for it but, "PLUNDER".https://finance.yahoo.com/news/bankrupt-sears-gets-ok-pay-153021108.html

What company really needs to keep thieves and crooks to reap rewards? Corporations need to be "ordered" to promote up from within, most store managers could handle anything that those CEOS couldn't and wouldn't. Same goes for the rest of the Cons.

The Great American Heist is a lot older than one. I'd say it's pushing at least 40 and looks older than 60. Throw in TAXES anywhere along that time line.

Learnt something? I am surprised the same economists have not signed on to the new capital gains tax cut that the republicans now want. They may even claim that this new tax cut will solve any problems caused by the first one. The idea is to get the tax cut for their rich friends, the consequences for the country do not matter.

Would you accept a friendly amendment? That your fact is correct but misleading? The tax revenues that are up are up because of more workers and better technology. The tax revenues that were supposed to be up because of higher investment—the corporate tax revenues—are down.

The additional taxes coming from more workers and better technology were caused by investments by businesses, investments that derive from a companies net income. Growth derives only when this net income exceeds existing costs.

If you cut corporate taxes to zero, the money just doesn't disappear into Scrooge McDuck's vault. It inevitably bubbles up somewhere else, and is taxed at that point, becoming with the exception of any amount temporarily retained by the firms, income to workers, income to vendors, or income to owners.

To me the more important question we should be asking ourselves is why hasn't more of the money been spent on increasing production and growing business, and what can we do to further incentivize that

Ummmm... As best as we can tell at this point, less than 1/10 of the money that Republican economists, the Trump administration, and the congressional majorities had predicted would be spent on boosting investment has been spent on boosting investment. Instead, it has gone into the pockets of the world's upper class—2/3 to American residents, 1/3 to residents abroad.

That's bad for the country, but I can console myself with the idea that it's good for my particular family.

Thanks for asking, but as it was the owners' money to begin with, not mine, and not the government's I don't really need to console myself at all.

If the problem we're solving for is growing the economy while providing necessary government services, isn't it wiser to incentivize owners to reinvest in the firms, while cutting government spending and regulation significantly?

the tone of the discussion around things like tax cuts, or the role of the government in the economy, is a good reflection of an increasingly infantile state of the American Republic and the American Public that comprises the American Republic.

Taxes can be too high, and they can also be too low. The intervention of the state in the markets can be excessive, but it can also be insufficient.

Fanaticism is what we have to fear, and at the same time resist and fight. If we do not marginalize fanatics, they will first marginalize us, and then lead the world into a catastrophe, as fanatics have always done.

Interesting read.got a request for 2 clarifications:1. Which series do you use to make the investment figure. "Investment" is a bit vague and I'd like to dig down into the numbers.2. From the line "But proponents of the bill nonetheless claimed that we would see enough additional investment to boost growth by 0.4% per year." could I get a citation for some proponents, please? Are we talking economists or just politicians/pundits?Thanks in advance!

Dr. DeLong- thanks for the link. Some of the other graphs on that referenced page really allow for "general readership" to grasp more easily the real disparity of "real investment" in the US, and the real distribution of any "options" to even participate in any real wealth sharing, due to the fact of the lack of investment that is revealed in the one chart that you used in this article.

"...additional investment to boost growth by 0.4% per year. That implies an annual GDP increase of roughly $800 billion, which would require annual investment to rise from 17.5% to about 21.5% of GDP."

Add to the list another deplorable of an even lower order, a co-author with Kudlow, Brian Domitrovic. Harvard PhD (2000), making history as Assoc. Prof at Sam Houston State University (queue the celebratory, nay, Dionysiac Yosemite Sam gunshot sound effects). In a 12/18 contribution, "George H. W. Bush's Voodoo Rhetoric", he neglects to point out that Reagan doubled the national debt, but then Grenada ("never forget") was worth it. See - https://www.forbes.com/sites/briandomitrovic/2018/12/02/george-h-w-bushs-voodoo-rhetoric/#2ff25121798a

Mr. De-"Long Discredited" has been a purely political phony since his credibility was torn apart in the mid-90s. It is interesting to read him here calling out supposed "charlatans" when indeed he may be the greatest of them all. The chart he includes in his article clearly shows a turnaround in the share of investment coinciding with the election of our current president - a turnaround precisely consistent with the "rapid increase in investment" he claims never materialized. As for his talking points about the larger picture, Mr. Delong notes that predictions made "were primarily long-run," and seems to immediately forget this point when he reaches the premature conclusion that any positive predictions have been proven wrong. In fact, the proponents of the tax bill have been largely correct in their assessments of the immediate impact of the tax bill on GDP among other things - a fact that cannot be said about the "neutral" Tax Policy Center. Mr. Delong has repeatedly strayed from the "pursuit of truth" he claims to endorse; he will continue to spew these lies to the detriment of his character and the profession as a whole. Thankfully, the reasonable among us learned long ago to, as he suggests, ignore him.

The turnaround in the trend of the investment share happened in the summer of 2016—back when Hillary was still generally thought highly likely to win. And the increase since Trump's inauguration in annual investment relative to a constant-share baseline is not the claimed $800 billion but rather 1/8 of that.

So I really do not understand what you think you are doing, or who you are working for...

Of course, it’s her right to sew how she likes, but to tell ya the truth,There’s a lot of loose threads in her sewing project. She’s having some problems stitching everything together quite transparently seamless.

Did Ma just spin me another yarn, As PROFIT took TIME beamlessly, breathlessly, as a disappearing lump of coal, melting into something like ICE?https://www.theice.com/indexhttps://simplywall.st/about

That slippery little devil, PROFIT.

While I was writing, while referring to weaving while adding, not staking, while weaving, but taking away,

PROFIT is missing from home.The last time I saw him, he was just a blur, searching from Archimedes point. His tail, wagging so quickly,cracked the egg of Columbus, turning into a googleyness, knotted by Gordian, becoming DATA, a slippery fellow, indeed.

PROFIT must be totally confused, especially while still missing as DATA.

Even DATA is missing from CDOT@Colorado.gov, especially @ Statistics of Income, for Statutorily Required Reports from 2014-2018, and especially in a lot of other places like that in North America.

Hopefully I am not guilty, in the eyes of anyone or anything, for putting on AIRS:https://www.airs.org/i4a/pages/index.cfm?pageid=3363

What's really important about that little "sinker" can be found by paying real close attention to the context and details as displayed in the hyperlink on that page. Click on the words "use cases". Ponder a few bits.

To untangle a lot of lines that are pretty tangled, "I&R ENTITY" is a pretty important knot to start to perceive, interpret, examine, phrase and rephrase, the real problem that "time and space" are really churning up and down and rocking a lot of boats.

this old link may give another "bit" to the clarification process of certain aspects about "profit", it's a worthy read: http://savingtheworldeconomy.blogspot.com/2011/11/real-cause-of-current-economic-crisis.html?spref=tw

"Profit"- presently, because I don't want to attempt to develop the full issue right here and now, I will be somewhat brief. I am also going to generalize in a somewhat simplistic way. Over the last 40+years there has been a major significant trend in the number of public corporations in the US.

Here's a good source-https://corpgov.law.harvard.edu/2017/05/18/looking-behind-the-declining-number-of-public-companies/to explain some of the dynamics. However, change in number does not necessarily affect change in the dynamics of "profit taking" if there is even any to begin with.

Simultaneously, sort-of, there has been a significant trend in consolidation of money flows, after any fact of any real profit distribution. And yes, unfortunately really, but fortunately for you, you are one of the present beneficiaries of the present consolidation of "money flows". The Democrats, which you effectively represent as an economic policy spokesman are no more idealists than the Republicans. So, you are in the same bucket. So even though you are superficially, as an academe, part of the superficially identified ( correctly, or incorrectly) elite. So a lot of money is being directed in certain political channels, very effectively, and privately.

My predicament: I am not. I am one of the little fishies in the sea, that has been attempting to avoid getting snared. So I have to be extremely skeptical, while I appreciate what you have written. Everybody has to make money to survive. You make your money by writing on economics, and teaching about economics. I barely have a change of getting, let alone keeping any money at all. A good majority of people are in the same predicament. I am being quite presumptuous that you are in a better predicament than I am. I am acknowledging that you are the "informer" and I am trying to be "informed". I just have to be real careful in the process to stay alive. I presume you do not have to be as careful as I do, as I presume my resources are less than yours. I do not benefit from the money flows that I cannot even catch a glimmer, in the deep dark sea.

I personally really appreciate what you have written in your article. You are attempting "effectiveness" and to do more than some of the other economists. "Doing" in the real world is difficult work.

It's also kinda like fishing. Some lines really catch a fish, but a lot of lines get lost in the water. And a lot of fish never catch on.(It depends if you are in or out of the water, and how hot it is.)

Anyway, I thought your graph really was a difficult one to interpret quickly and easily for the real deep subject that you were addressing. Who really notices decimal points and the fact of just what a minuscule amount is depicted, relatively speaking/writing?

Applebaum also starts to pose the question for some of the real dilemma.

You finally address some ethical concerns, and economists have been avoiding ethical responsibility for years now. Really, how many so-called economic specialists really know all that much about economics?Theoretics, statistics and reality are different realms.

Time factors really need to be addressed by more economists than just you, and publicly like you are doing. It is definitely challenging, and you are probably very busy with your class schedules and professional focus.

Would you address M2 and money velocity sometime?

The political mis-focus nationwide is just distracting from any reasonable discourse about the real revenue decreases, and real causes. I think it is deliberate strategic political maneuvering due to focus on "winning elections" and ABSOLUTELY NOTHING ELSE. That focus really shows in the "news" about the present administration. It's hard to even conjecture if it was a Hillary regime. SNL did a great job, and I only saw snippets of the satire!

Taxes are necessary, as much as we all hate giving up our share of any pot. (there's a lot of puns there!)

Ethics, honesty and a clear picture needs to be communicated more so than ever today, especially publicly, and especially on certain platforms.

As soon as I get access to Yale's online data through OSU, hopefully, I would love to meander through some of Tobin's ideas that I think are just horribly ignored, and if not ignored, mis-applied.

So the wonderful world of tax cuts have been long proven to advance the country as a whole? Examples, please. On another note. The reinvestment of those copious tax advantages was going to not buy back shares of their given company. "They better not" I believe was the phrase the President used. Is that in fact what has been happening? I am skeptical.

No, gullible. Most of the present additionally increasing "buybacks" have been courteous of guess-who, and why? Those CEO's and other buddies are walking away with billions of profits due to "churn" especially because of "buybacks".

I wonder what lovely redevelopment projects will be the result of the new "Opportunity Zones" across the US. I expect a good amount of profiteers funds will be ploughed into the vacant undeveloped flatlands, of especially Colorado. And of course, new schools that the wealthy are building for themselves, and then so sweetly sharing with "taxpayers", with annual tuitions above $7,000+. The educational vultures should do a good job of decimating public education access, down to NO real educational access for many US citizens nationwide. You can't learn much sitting at a computer screen, and manipulating "boxes" and "lines", in isolation.

So are you really saying that if not for the tax cut investment in America in 2018 would have _fallen_by $800 billion relative to what it was in 2017? By what mechanism do you think that would have happened?

A correction—I missed this in editing. It is not quite true that Greg Mankiw "claimed that the productivity gains stemming from the tax package would primarily boost wages" <https://gregmankiw.blogspot.com/2017/10/an-exercise-for-my-readers.html>. Rather, he claimed that the "relevant exercise... [was] an open economy... [in which] he capital stock adjusts so that the after-tax marginal product of capital equals the exogenously given world interest rate r" and thus that the productivity gains stemming from the tax package would primarily boost wages. The distinction between "cl and "relevant exercise shows" is there, and is what it is. I regret my error.

I compliment you on having some decency to dive down a bit into the lower echelons of humanity, even though the problem still isn't corrected.

However, I am not going to be very nice with my next line.

What you and a few other economists really need to do is to re-read some of James Tobin’s writings. You really need to focus in on some of the footnotes, especially on “Liquidity Preference as Behavior Towards Risk” and a few other such articles from way back when, starting in 1957 or so. Then you need to have some engaged conversations with a lot of regular citizens across the nation. Then you need to join up with some good project teams that are focussing on more business “activities and action plans” other than short-term profits, especially for themselves, during their immediate life-spans, and possibly their immediate progeny. Politics does not equal economics. Politics does not even equal political economics. And, I haven’t even gotten to the word “theory”.

Here’s a thought jump. check out this link: https://choosecolorado.com/opportunity-zones/

This map that the “Economic Innovation Group” is using, and I guess courtesy of them, the state of Colorado has been able to use also, quite successfully on the full state transparency website. EVERY STATE in the US should be functioning at this level in 2018. They are not. Now, a, but not THE problem, I think is that EIG is “using map resources from the Census Bureau and Federal government”- and for whose real profit? Who is profiting from all the secondary and tertiary “business/economic” private capture so far in the process of the “Opportunity Zones” project? It’s debatable on just what the Opportunity Zones really are, and I don’t want to dive further into that territory as I have already “strayed”.

Perhaps, if you and a few other economists will do their part, by pursuing my first suggestion, I might even want to write to some of you again during my present life-time.

As you can tell, I am very opinionated, right or wrong, but, I really do like all you guys.

The "trade war" has not been really launched yet—except for the unfortunate soybean and other farmers whom Trump has put in the crosshairs. It hasn't yet had an impact on the economy in the large for us to see in the aggregate statistics.

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